Money Laundering Bill Restrictive, Casinos And Banks Say

Wellington, Aug 20 NZPA - Casinos and financial institutions say a bill to curb international money laundering is too restrictive and New Zealand's laws should be brought in line with those in Australia.

Millions of dollars of criminal proceeds were laundered through New Zealand last year, including $120 million which was transferred from Australia to Vanuatu via New Zealand.

The Anti-Money Laundering and Countering Financing of Terrorism Bill would require businesses that dealt with the public to establish systems which prevented or detected transactions made by criminals trying to launder money.

It would also oblige the financial sector to report all suspicious activity.

Justice Minister Simon Power had said the bill was needed to counter the financing of terrorism and to bring New Zealand in line with international Financial Action Taskforce standards.

However, a select committee was told today the bill was overly prescriptive.

Stephen Johnston, project delivery manager of ASB parent company the Commonwealth Bank of Australia, said the bill should take into account the levels of risk posed by different types of customers.

The bank already had a robust, risk-based money laundering detection system in place, he said.

"It's about monitoring behaviour on an ongoing basis so that we can pick up things we think are suspicious.

"We can investigate them properly, and then report those through the regulator."

Differences between Australian and New Zealand standards could lead to unnecessary costs and implementation difficulties, Mr Johnston said.

Speaking on behalf of New Zealand casino operators, SkyCity regulatory affairs manager Philip O'Connell said the identification requirements of the bill were too restrictive.

Casino staff would not be able to let customers transfer amounts over $10,000 without proof of address, he said.

"We estimate that would have a significant impact on our business."

Casinos were already expert at detecting suspicious behaviour and a risk-based approach in line with Australian regulations would be appropriate, he said.

When the bill was given its first reading in Parliament, Mr Power said the government recognised it would place additional costs on New Zealand businesses.

"However, without this bill we could face increased costs for crown borrowing, higher thresholds for New Zealand businesses trying to access international capital, as well as the higher interest rates that may follow such increased scrutiny," he said.